Valero Energy

Valero Energy Corporation
	File:Valero Energy logo.svg Valero Energy logo
Company type	Public company
Industry	Petroleum refining, renewable diesel, ethanol production
Founded	January 1, 1980; 46 years ago
Headquarters	San Antonio, Texas, United States
Area served	United States, Canada, United Kingdom
Products	Fuels, renewable diesel, ethanol, petrochemical products
Number of employees	9,908 (2023)
Website	www.valero.com

Valero Energy Corporation is a U.S.-based producer of fuels, focusing on the creation and distribution of transportation fuels along with associated petrochemical products. The company’s headquarters are located in San Antonio, Texas, and it manages 15 refineries situated in the United States, Canada, and the United Kingdom, collectively processing approximately 3.2 million barrels daily. Additionally, Valero operates two renewable diesel facilities that generate close to 1.2 billion gallons each year, alongside 12 ethanol plants with an aggregate output capacity of 1.6 billion gallons annually.

As a prominent manufacturer of low-carbon liquid transportation fuels, including corn ethanol and renewable diesel, Valero emphasizes its commitment to sustainable energy development.

History

Valero originated on January 1, 1980, emerging from a divestiture of Coastal States Gas Corporation’s subsidiary, LoVaca Gathering Company. It assumed control over LoVaca’s natural gas operations, which were subsequently renamed Valero Transmission Company. Coastal States faced legal challenges during the 1970s related to natural gas shortages, culminating in a $1.6 billion settlement that facilitated Valero’s establishment.

The company’s name pays homage to the Mission San Antonio de Valero. Early growth included acquiring Corpus Christi Marine Services in 1981 and creating Valero Refining and Marketing Company from Saber Energy Inc. in 1985.

In 1997, Valero combined its natural gas segment with Pacific Gas and Electric Company and separated its refining assets to form the current Valero Energy Corporation. That same year, it purchased three refineries from Bassis Petroleum and followed up in 1998 by acquiring the Paulsboro Refinery from Mobil, positioning itself as the second-largest independent refiner in the U.S.

Valero strengthened its presence in California in 2000 by buying the Benicia refinery and Exxon-branded service stations, initiating sales under its own retail gasoline brand. The following year saw acquisitions of two asphalt plants on the West Coast and completion of the Ultramar Diamond Shamrock merger, which included Shamrock Logistics (later rebranded as Valero L.P., then spun off as NuStar Energy in 2006). From 2002 onward, Valero expanded its marketing reach to the U.S. East Coast.

By 2003, Valero had acquired refinery and pipeline assets from El Paso Corp in Texas. In 2005, it purchased Premcor Inc. for $8 billion and started converting Diamond Shamrock-branded stations to Valero branding. The company further expanded retail operations by acquiring 72 Albertsons gas stations in 2008.

Confronted with financial difficulties in 2009—including average daily losses near $1 million and workforce reductions amounting to 500 employees—Valero made the decision to permanently shut down its Delaware City refinery.

That same year marked Valero’s entry into the ethanol sector through acquisition of ten plants located in the Midwest. In 2011, it partnered with Darling Ingredients Inc. to form Diamond Green Diesel Holdings (DGD), establishing a renewable diesel facility adjacent to its St. Charles refinery.

Also in 2011, Valero acquired Chevron’s Pembroke Refinery in Wales along with marketing and logistics operations across the UK and Ireland, encompassing pipelines, terminals, and roughly 1,000 retail locations.

In 2013, Valero divested its retail business by spinning off CST Brands but maintained fuel supply agreements with over 7,000 outlets under long-term contracts. That year also marked the commencement of renewable diesel production at DGD’s St. Charles facility.

DGD undertook expansions at its St. Charles plant beginning in 2019 and achieved increased capacity by 2021. In 2022, a second renewable diesel plant was inaugurated adjacent to Valero’s Port Arthur refinery.

In April 2018, Valero unveiled a refreshed corporate branding named "Vanguard," introducing new logos and store designs incorporating blue, white, and yellow color schemes; this rebranding was fully rolled out across all locations over several months.

Operations

Valero's business activities are divided into three primary divisions: refining, renewable diesel production, and ethanol manufacturing.

Refining

This division encompasses Valero's portfolio of 15 petroleum refineries, alongside the distribution of refined products and the management of associated logistics infrastructure.

Renewable Diesel

Valero manages Diamond Green Diesel (DGD), which consists of two facilities located along the U.S. Gulf Coast. These plants collectively generate approximately 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha each year.

Ethanol

The ethanol segment comprises 12 production plants with a total annual output capacity near 1.6 billion gallons.

Sustainable Jet Fuel

In January 2023, Valero partnered with Darling Ingredients Inc. to initiate a Sustainable Aviation Fuel (SAF) project at the Diamond Green Diesel facility in Port Arthur, completed by October 2024. This plant now produces 235 million gallons annually of SAF, which is a blend consisting of equal parts synthetic paraffinic kerosene and traditional jet fuel. This fuel reduces greenhouse gas emissions by between 74% and 84% relative to conventional jet fuels.

In October 2024, Southwest Airlines entered into a two-year agreement to utilize Valero’s SAF at Chicago’s Midway International Airport, supported by Illinois' SAF tax incentive enacted under Governor JB Pritzker. Earlier, in March 2024, JetBlue commenced using Valero’s SAF at John F. Kennedy International Airport, marking the first long-term sustainable jet fuel adoption in the Northeastern United States.

Finances

For the fiscal year 2017, Valero Energy reported net earnings of US$4.065 billion on revenues totaling US$93.980 billion, representing a 24.2% increase compared to the prior year. At that time, shares traded above $67 per share, with market capitalization surpassing US$39.2 billion as of November 2018. Valero was ranked 31st on the Fortune 500 list based on total revenue for 2018.

By 2023, Valero's net income rose to US$9.149 billion alongside revenues reaching US$144.766 billion. The stock price was approximately $130 per share, with market capitalization exceeding US$44 billion. In the Fortune 500 rankings for revenue in 2022, Valero held the 40th position.

Year	Revenue in mil. USD$	Net income in mil. USD$	Total Assets in mil. USD$	Price per Share in USD$	Employees
2005	80,616	3,577	32,798	47.17	22,068
2006	87,640	5,461	37,753	46.76	21,836
2007	89,987	5,234	42,722	64.01	21,651
2008	106,676	−1,131	34,417	19.78	21,765
2009	64,599	−1,982	35,572	15.31	20,920
2010	82,233	324	37,621	21.13	20,313
2011	125,987	2,090	42,783	19.24	21,942
2012	138,393	2,083	44,477	31.19	21,671
2013	138,074	2,720	47,260	50.40	10,007
2014	130,844	3,630	45,550	49.50	10,065
2015	87,804	3,990	44,227	70.71	10,103
2016	75,659	2,289	46,173	68.32	9,996
2017	93,980	4,065	50,158	91.91	10,015
2018	117,033	3,122	50,135	74.97	10,261
2019	108,324	2,422	53,864	93.65	10,222

Environmental record

In 2005, the Political Economy Research Institute placed Valero at 28th among U.S. companies for airborne pollutant emissions, reporting 3.4 million pounds released that year. By 2010, Valero invested over $4 million to back California Proposition 23, an initiative aimed at postponing the enforcement of the state's Global Warming Solutions Act of 2006 until unemployment dropped to 5.5% or less for a full year—a condition critics claimed was seldom achieved, effectively putting the legislation on hold.

Valero's operations in California include two refineries: the Benicia Refinery situated on the Carquinez Strait and the Wilmington Refinery near Los Angeles. These facilities, together with the Port Arthur refinery in Texas, processed crude oil sourced from the Amazon region, which sparked environmental concerns regarding the preservation of rainforest areas. In 2015, the Wilmington and Benicia refineries handled roughly 13,000 and 7,200 barrels per day of Amazonian crude oil, respectively.

In 2022, the environmental organization San Francisco Baykeeper initiated legal action against Valero and Amports for unlawfully discharging petroleum coke from the Benicia Refinery into San Francisco Bay. The case concluded with a settlement in October 2024 amounting to $2.38 million, which included commitments to remediate the affected site and invest in equipment designed to prevent future spills.

Valero faced an $82 million penalty in 2024 imposed by the Bay Area Air Quality Management District and California Air Resources Board due to air pollution violations at its Benicia facility—marking the largest fine ever levied by the District.

Amid regulatory challenges and escalating expenses, Valero announced in April 2025 its decision to cease operations at the Benicia refinery after incurring $1.1 billion in impairment charges related to its California assets during the state’s shift away from fossil fuel dependence.

EPA Compliance and mitigation

In 2020, Valero and its subsidiaries reached a settlement with the United States Environmental Protection Agency (EPA) concerning alleged breaches of the Clean Air Act involving fuel standards and refinery compliance issues. The resulting consent decree requires Valero to establish a comprehensive Fuels Management System across its operations to ensure ongoing adherence to regulatory requirements. An audit conducted in 2023 by Montrose Environmental verified Valero’s significant initiatives aimed at addressing environmental and public health challenges in underserved communities, consistent with EPA environmental justice objectives.

Carbon footprint

For the year ending December 31, 2020, Valero disclosed total CO2e emissions (both direct and indirect) of 27,500 kilotonnes, representing a 6.8% reduction compared to the previous year.

Year !Revenue in mil. USD$ !Net income in mil. USD$ !Total Assets in mil. USD$ !Price per Share in USD$ !Employees

Annual total CO2e emissions reported by Valero Energy (kilotonnes)
Dec 2017	Dec 2018	Dec 2019	Dec 2020
30,400	30,400	29,500	27,500

Defense contracts

Valero has obtained multiple contracts valued at several hundred million dollars from the U.S. Defense Logistics Agency Energy (DLA Energy) through its Defense Energy Support Center (DESC), providing fuel supplies for various military operations. Of particular note is a $157 million contract awarded in 2017 connected to Israel’s defense requirements. These government energy contracts constitute a significant portion of Valero's revenue stream and bolster its position within the defense fuel supply market.

Divestitures

In 2010, Valero exited its operations along the U.S. Atlantic coast. The Delaware City refinery was shut down in November 2009, and its associated assets were sold to PBF Energy Partners LP in September 2010 for approximately $220 million. Soon after, Valero transferred ownership of the Paulsboro refinery to PBF Holdings, thereby completing its withdrawal from refinery operations on the East Coast.

Acquisitions

Valero broadened its presence in Europe and enhanced its U.S. supply network in 2011 by purchasing the Pembroke Refinery from Chevron for $730 million, excluding working capital estimated at about $1 billion. Pembroke ranks among Western Europe’s largest and most sophisticated refineries, boasting a processing capacity of per day and a Nelson complexity index rating of 11.8.

Additionally, Valero acquired interests in four key pipelines, eleven fuel terminals, an aviation fuel business with a daily capacity of , and over 1,000 wholesale sites operating under the Texaco brand, which Valero continues to maintain in these markets.

Retail

Valero distributes gasoline through various brands including Valero, Shamrock, Diamond Shamrock, Beacon, and Total—the latter used under license from TotalEnergies. Although these brands enjoy significant market visibility, CEO Bill Greehey has highlighted that retail operations constitute only a minor segment of Valero’s overall business.

In a strategic move to elevate brand positioning from discount to premium, Valero initiated rebranding efforts converting Ultramar, Beacon, Total, and Diamond Shamrock stations into the Valero brand. The Beacon and Shamrock names remain as budget-friendly options; notably, Shamrock traces its heritage to the former Shamrock Oil and Gas Company which merged with Diamond Shamrock in 1967. While Ultramar was phased out within the United States, it continues as Valero’s brand identity in Canada.

The "Corner Store" retail format was launched by Valero in 2007 with an initial prototype established in San Antonio. This concept evolved from the Diamond Shamrock portfolio acquired in 2001. Not all Valero locations include Corner Stores; some are co-branded with convenience retailers such as 7-Eleven.

Creation of CST Brands

On July 31, 2012, Valero declared its intention to spin off its retail division aiming to increase operational agility and unlock shareholder value, as explained by CFO Mike Ciskowski. The spinoff was finalized in 2013 with the formation of CST Brands, marking Valero’s divestiture of retail outlets operating under Diamond Shamrock, Shamrock, Beacon, Ultramar, and Total brands while continuing to supply fuel products. In the UK and Ireland markets, Valero sells fuel under both Texaco and Valero names and began pilot marketing of Valero-branded fuel at three stations near its Wales refinery in October 2023. Expanding internationally, Valero introduced its brand into Mexico in 2020 and by 2024 provides branded fuel to approximately 260 gas stations nationwide as part of its strategic growth initiatives.

Credit cards

Valero manages a private label credit card program for its fueling stations through DSRM National Bank, a subsidiary specializing exclusively in credit cards. The acronym DSRM stands for "Diamond Shamrock Refining & Marketing," reflecting the original entity that developed this program prior to Valero’s acquisition. Based in Amarillo, Texas, this financial services operation leverages legacy systems from Diamond Shamrock to support customer payment solutions and loyalty programs.

External links

Valero Energy Facility Locator